Whether you purchased your home to live in or as an investment, the time has come for you to put it on the rental market. You are preparing to become the owner of a rental property. You are probably asking yourself “what do I need to do to rent out my home?” This question may be a little scary as you navigate this process for the first time. You have some decisions to make, the below information will help you through the process.
Make necessary repairs, with cost in mind
Once the personal household items are removed, inspect the entire property. If you have previously lived in the home, you should already be aware of any necessary repairs that need to be made.
All appliances that will be included in the rental should be in working order, everything should be working properly in the home, no leaks, air conditioning/heating should be functioning, door and cabinet hardware should be in good working order, etc.
If you have major repairs that need to be done, contact a licensed contractor if you are not 100% confident in your handyman skills. You will save money having it done by a professional the first time as opposed to purchasing tools and materials plus having to call in a pro to finish the project and/or fix your mistakes.
Get a couple of estimates, even if you “know a guy,” you will be surprised at the amount of money you can save. You may be tempted to use an unlicensed handyman, but you will find that a licensed and bonded contractor will often have comparable prices with the guy doing the work on the side. If you choose an unlicensed contractor you will have very little recourse if the work is not what is promised, potentially costing you way more money in the long run.
Work on curb appeal
Curb appeal is the appearance of your home when someone drives by or initially sees it. Whether an interested tenant views your home from a real estate website, a realtor, or just by passing by and seeing your sign, the first impression is probably the most important. If they are not impressed by the exterior, you will not even get them in the door to see all your home has to offer.
Make sure the lawn is mowed, there are no weeds, the trees and bushes are trimmed, and the exterior is clean.
Most of this work can be done very cheaply on your own. Most gardening jobs can be done over the weekend. If shrubbery is dead or tacky looking you can easily pull them out and replace very cheaply with a variety of plants found at your local hardware store. The professionals in the gardening/outdoor department should be able to advise you on plants that do well in your specific location.
Don’t be afraid to seed and/or apply fertilizer to a lawn that has seen better days. The prospective tenant will be pleased to see that improvements and maintenance is being made.
Paint the exterior, if needed. You can do this on your own easily and at an affordable price. It is recommended that if you need to paint the entire house, try not to change the color if possible. You will know if the color needs to be changed. If the color is outdated, extremely bright, does not fit with the style of the home or the neighborhood, you may need to change the color. Just be advised, the larger the job the more money it will cost.
A licensed tradesman may be your best option for painting if you do not have the skill, tools or time to complete the project. Otherwise, there are many options to purchase quality paint products at an affordable rate.
Also, ensure that the back yard is clean and decluttered. Don’t break the bank on putting in an impressive garden in the back, you will not reap the rewards from the investment. Make sure any trash is removed, especially dilapidated swing sets or children’s play houses. If the trees are trimmed and the lawn is in good condition, most tenants will be satisfied.
Cosmetic improvements on the interior
There are many factors that come into play regarding when to paint the interior. The durability of your paint is dependent on the quality and whether a flat paint that was used.
As a rule, if it looks dirty or worn out, you need to repaint. Painting the interior of your house is a job most people will choose to do on their own.
Choose neutral, lighter colors when painting. If you use bright colors you may be constricting your pool of tenants as their furniture or decorations may not match with the colors you have chosen.
You should use a higher quality paint and I suggest using egg-shell on the walls for the living areas and the bedrooms. Use semi-Gloss in the bathrooms, doors and base boards.
If your cabinets need refreshing you have a few options. You can hire a skilled contractor, try sanding and re-staining yourself, or do my next suggestion.
A few years ago, I was remodeling one of my own rentals when I came across Rustoleum Cabinet Transformations. This all in one kit was incredibly easy to use. Everything you need is included and you have plenty of colors and styles to choose from. I was able to update the cabinets in the kitchen in one weekend, a majority of the time spent is waiting for the materials to dry.
I also used the Rustoleam Countertop Transformations to update an outdated Formica counter-top. I was ready to dish out a large amount of money when I decided to give this product a try. The decision paid off and the countertop still looks great three years later. On this one, I would suggest using black as it is very easy to repair any deep nicks and scratches.
Clean, clean, clean
Once all the repairs are made and your projects are complete, deep clean the entire house. Don’t miss a spot. Nothing will turn a prospective tenant around faster than a dirty home. Make sure the kitchen and restrooms are spotless and the home smells fresh. If animals were in the home, ensure you have cleaned everything to eliminate or minimize the odor.
Clean the walls. I am amazed at how much effort people will spend preparing a home but ignore cleaning the walls. Cleaning the wall will get rid of a lot of the lingering odors and make any walls not painted look 100% better.
Prepare the lease and list
Now that the home is looking good, you need to decide whether or not you will hire a property manager. A property manager will list the home, show the property, prepare the lease, and handle all monetary transactions. If eviction becomes necessary, they will take care of that as well. A property manager can save you time and frustration, but you will pay for it. Most property management companies can take up to 40% of the initial months’ rent plus 8-10% of the monthly rent thereafter.
You will save money listing the property and managing on your own but you will have to do all the work, such as list, show, prepare the lease, determine the price, review the application, screen the tenant and collect the rent every month.
A property manager will compare your home to others in the area and suggest a listing price. You can do this on your own and Zillow.com is a resource I have used in the past to set the rental price of homes, as many of the prospective tenants will utilize this resource as well.
There are pros and cons to using a property manager. Some of my properties are managed by a realtor and some are not, the negatives and positives are not universal and vary from market to market. This decision is up to you.
Either way, you are now the owner of a rental property. Protect your investment and good luck!